Consumer Alert: Parents, you could get $8,000 for childcare when you file your 2021 taxes. Here’s how.
ROCHESTER, N.Y. (WHEC) — Parents, you could get $8,000 for childcare when you file your 2021 taxes. Here’s how.
For many of you, tax season could be the most wonderful time of the year. That’s because some family-friendly tax credits this year could put much more money in your pocket. A big one is expanded credits for dependent care.
Rochester parents pay an average of $8,545 a year for childcare for preschoolers. Add another $800 if your child is under two. Consider the fact that in Rochester, the median monthly income is $2,996. Now consider the fact those families are paying more than an average of $712 a month for childcare. That’s about a quarter of their monthly income.
In past years, the maximum childcare tax credit was $1,050 for one child. Now it’s $4,000 for one child, $8,000 for two or more.
I chatted with the leaders of Say Yes Buffalo, a non-profit that’s providing filing assistance for low-income families.
“In the first three weeks of our program we served 247 families and those families received over a million dollars in refunds," said Aaron Lowinger, Communications and Graphics Manager for Say Yes Buffalo. "Poverty is a huge issue for families Rochester, Buffalo, Syracuse and any funds that will go right into people’s pockets will make the most difference."
So I did the math. This free tax assistance program was able to help low-income families get refunds averaging about $3,650 each. And that’s due in large part to some family-friendly tax changes this year.
Here’s a snapshot of other expanded tax credits you need to know about.
- The 2021 child tax credit increased to $3,000 for kids 6 to 17 and $3,600 for kids 5 and under. It was $2,000 before. If you got advanced child credit payments last year, you’ll get the other half of your credit when you file.
- We got two stimulus payments in 2021. If you didn’t get your money, you can claim a recovery rebate credit.
- The earned income tax credit for folks without children has nearly tripled from $538 to $1,502, and you can now claim that deduction if you’re as young as 19. The cut-off used to be 25.
- Even if you claim the standard deduction, like most filers, couples can now deduct up to $600 for charitable contributions, $300 for single filers.
In short, even if you usually don’t have to file taxes, the IRS says you should file this year. For example, the earned income tax credit for low-income filers has been expanded giving you much more cash than you’ve gotten before.
So while you’re gathering information for your preparer or squinting at the Turbo Tax forms on your computer, think about the cash that’s coming your way, and perhaps we can all treat tax day like your birthday. Consider it a gift from your favorite uncle named Sam.